Question: Fortura Company is considering adopting a JIT system Fortura estimates
Fortura Company is considering adopting a JIT system. Fortura estimates that facility-sustaining and product-sustaining inventory costs will decrease by $ 300,000 if JIT is adopted. However, Fortura anticipates a $ 240,000 increase in prevention and appraisal quality costs to reduce external failure costs by $ 50,000. Finally, Fortura estimates that a one-time cost of $ 100,000 will be required to install a kanban system. Should Fortura adopt JIT? Why?
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